The Great Depression made a lasting impression on our family and many American families. Farming in middle America, my mother’s family had just lost my grandfather when bad times hit. Grandmother, unable to keep farming, and my mother, who was forced to quit school, went to work sewing in one of President Franklin Roosevelt’s make-work programs to make ends meet. That public works program, along with food staples from mother’s uncle’s grocery store, kept a large family together. We were fortunate compared to many American families.
Reasons for the crash of 1929 were complex, but as the old saying goes, people who ignore history are doomed to repeat it. Prior to 1929, we had a series of three presidents, ending with Herbert Hoover, who were pro-big-business and who strongly favored letting the marketplace take care of itself. Pre-Depression unrestricted competition, lack of regulation, and “let the buyer beware” were the rules of the day, and these same ideas have re-emerged. The end result of those ideas—the human
suffering during the Depression—has long been forgotten; no jobs could be found, soup lines were common, and migrant worker camps were referred to derogatorily and appropriately as Hoovervilles. Hoover had lost touch with the stark reality that existed and the concerns of common Americans. The extreme right-wing Hoover Institute spews many of the same ideas that helped lead to the Great Depression. They argue for no government regulation, and tax cuts for corporations and the wealthy. The end results, again, are that the middle class pays all the taxes and our economy appears to be slowly grinding down.
Time during the last 80 years and the constant right-wing drum beat from Washington during the last eight years has erased the meaning of Hoovervilles from our collective memories. We need reasonable regulation of the oil industry, insurance, banking, and home lending industries. But more importantly, we need to immediately stop the largest outflow of our collective national wealth in U.S. history. We need to stop borrowing to pay for our wars, and we need to establish a clear path to alternate non-oil energy sources. Without change, our national economic well-being becomes more dismal with each passing day as we send our wealth out of the country to pay for fuel and borrowed money to pay for wars and to bail out unregulated industries.
Deregulation and lack of enforcement of the housing and lending industries have led to the national meltdown of our housing industries. The extreme right-wing chant for deregulation is “drill now,” but is this mindless chant in our long-term national best interest? Drilling will naturally occur because of the high price of crude oil. All across California and the nation, oil companies are scrambling to find drilling rigs to sink additional wells. Our national appetite for oil has grown so large that maximum drilling will have no effect on prices even in 10 years when these activities come online. All of these combined drilling activities will fill only three to five years of our national consumption. America, with only three percent of the world’s oil reserve, is running out of oil, but there are things that will help in the short term. Switching our infrastructure to natural gas and increasing the capacity of existing oil refineries will lower prices and give time for alternatives.
Internal oil company memos found by consumer groups have shown oil industry efforts to reduce its refining capacity, to substantially increase refinery margins. Success can be seen with windfall oil company profits year after year. Few refineries have been built in years, and this bottleneck fills the coffers of oil companies. Enforcement of regulations against price fixing seems to be in order.
National long-term energy needs should be filled by starting now to harness solar, wind, clean coal, and other alternate energy transportation sources so that we are no longer at the mercy of foreign countries and of profit motivated oil companies. Following national trends, Central California is ideally situated, halfway between two large metropolitan areas, to manufacture and distribute these new energy technology products. Local leaders would be wise to begin now to seek out new energy manufacturing technology companies to locate on the Central Coast.
“Drill now” is a nostalgic hollow chant, not grounded in fact or reality, and not an energy plan, and not forward with a sound, long-term plan that America so desperately needs. The past and the present have taught us that unregulated business activity can lead to precipitous crashes. Its time for reasonable regulation of these industries that fits within national goals to become energy independent and stop the massive outflow of our nation’s collective wealth.
Ken McCalip is a North Santa Barbara County native who holds bachelor and doctorate degrees in history, cultural geography, and law from various California universities.
He can be reached at foxmt.one@verizon.net.
This article appears in Oct 9-16, 2008.